Tajikistan: Remittance Economy Leaving Long-Term Social Impact

The omnipresent yellow and black Western Union signs in Khujand, Tajikistan's second largest city, say it all. Tajikistan's most valuable export is its manual labor. And as the world economic crisis sets in, the worth of that commodity appears to be declining rapidly, putting additional social pressures on this remote, impoverished nation of some seven million.

A recent World Bank paper estimates that roughly half the money in the country comes from workers abroad - the highest level in the world. Ninety-eight percent of those remittances originate in Russia, according to the Asian Development Bank.

This system has worked for most of the last decade while Tajikistan has enjoyed the residual effect of Russia's economic boom. Now, with a slowing economy worldwide, the pain may just be starting. At a recent press conference, Dovlyat Usmon, the former Minister of Economy of Tajikistan, estimated that between September and November, "Remittances from migrants decreased by 50 to 60 percent, which is 20 percent of the Tajik GDP." The International Monetary Fund has also modified downward its growth forecast for Tajikistan. Axel Schimmelpfennig, head of the IMF's mission to the country, recently told reporters that "Growth for Russia and Kazakhstan has been revised down and this is likely to affect the remittances coming into Tajikistan." As further evidence of the growing crisis, in November some 250 Tajik workers walked off the Alfa-Story construction site in Yekaterinburg to protest mounting unpaid wages. Other strikes have also been reported.

Other migration studies estimate that some 30 percent of economically active males now earn a living outside Tajikistan.

Many were doctors or teachers trained in Soviet schools. Most are husbands and fathers leaving families behind.

Roughly one million Tajiks work abroad, most of them in Russia, where, the Asian Development Bank asserts, 98 percent of Tajik remittances originate. In Tajikistan's second city, that export is obvious. Below the colorful signs offering money transfers and plane tickets, scores of women wait in line to collect cash sent back from husbands and sons shipped off to work.

These remittances keep many families out of extreme poverty. But the funds camouflage the stagnant domestic economy and have created profound changes in the social structure of the country. Effects of migration are rippling through to the most distant corners of the economy. For example, a cattle farmer told EurasiaNet how his business suffers every spring due to the glut of cows in the bazaar. As the construction season begins in Russia, men scramble to raise enough cash for the $300 or $400 one-way ticket to Moscow, he said, selling their only income-generating assets to raise capital for the trip abroad.

Those men end up living "like dogs," said the mother of two workers in Russia. "My sons were sleeping with 10 others in a storage unit," in order to send their wages home, she lamented, while her husband boasted that the two sons collectively send home $1,000 a month - a sizeable income in Tajikistan - to support an extended family of 10.

These conditions, and a series of high-profile murders, have raised concerns about the safety of Tajiks in Russia. The economic slowdown is increasing tensions between guest workers and locals afraid of losing their own jobs. Violence appears on the rise, highlighted in early December by the decapitation of a 20-year-old outside of Moscow. The apparent failure of either Tajik or Russian authorities to investigate the murder has lead to growing tensions between the Tajik media and the Russian diplomatic mission in Dushanbe. [For background see the Eurasia Insight archive].

Subtler are the effects migration has on the family structure. Some men are gone for years before returning; others never return at all. Women are usually left to work in the fields or the bazaars. When asked about her husband, a fruit seller in Khujand's Panjshanbe Bazaar curtly replied, "He is dead." Her market colleagues quietly confided that her husband had left for Russia several years ago but hadn't been heard from since. The woman now raises her children alone. Many husbands are rumored to have remarried and abandoned their families back in Tajikistan.

Fatherless households tend to result in boys assuming the role of wage earner. A 12 year old pushing a cart through Panjshanbe Bazaar told EurasiaNet he doesn't attend school on the days he needs to help his mother bring her goods to the market. "I can't allow my mother to push a cart through the market, so on bazaar days I come to help," he said.

Commerce in Tajikistan is conducted on almost exclusively a cash basis and bank accounts are rare. Without any vehicle for accumulating savings, analysts fear most remittances are used for immediate consumption rather than investment. Home repairs are common, particularly given the aging infrastructure of the country. Another mother whose son had been working in Russia since 1997 said she is three years into adding a room to her home. "Once it's finished my son can come home to live there with his new wife," she proudly explained. Other purchases are less practical, however.

On Lenina, the main street of the city, stacks of televisions spill out onto the street in front of the electronics shops. Inside one, a steady file of customers gives close scrutiny to a 32" LCD set. The owner says that, while most buy cheaper tube sets, he sells one or two of them a month. At the auto market outside of Khujand, men sit in cars talking prices until a plastic bag of $100 bills and a set of keys are exchanged. While most can only afford an Opel or Daewoo, they slowly circle a large 2005 Chrysler 300 sedan and feign indifference when told the $25,000 asking price. Such items are still a rare luxury here but, flush with Russian wages, are now within reach.

What's more, with so many in Tajikistan now relying on outside wages, there is little incentive - or means - for the government to initiate a restructuring of domestic wages. Remittances are the hidden economy of Tajikistan; those willing to bear the costs of a migrant's lifestyle have enjoyed the benefits. And now as the supply of dollars slows to a trickle, it remains to be seen how the country will cope with not only the loss of income, but also the loss of so many fathers and sons.